I was having lunch a few weeks ago with an executive search consultant who used to work for me. He said he had recently had a rash of candidates accepting counteroffers. Generally, experts in the search business have long said that it is in candidates’ best interest NOT to accept counteroffers.

Nowadays, companies don’t want to lose a key executive. Recruiting someone new is difficult, taking time and money. There is a big temptation in the current market to make a counteroffer to prevent a person from leaving. But accepting a counteroffer can be a double-edged sword for all parties.

More than just money

Often, counteroffers are about money, but two other equally important factors in considering an offer are opportunity and location. For example, a person who received another offer may primarily desire a job that expands their responsibilities and place less of a priority on the exact salary. If their current organization is willing to change their job responsibilities or title, there is a possibility that the individual will accept the counteroffer. However, this has the potential to create some animosity among peers in the organization.

There is a very prevalent situation nowadays where a company will make a counteroffer allowing an individual to work remotely or even part time. To avoid reorganizing the job description, some organizations would be willing to be flexible on the time and place of the job.

Consider long-term consequences

When deciding whether to accept a counteroffer, both the organization and the person looking for an offer need to change their focus from the immediate details of the negotiations and consider the long-term consequences of accepting.

Someone who is about to leave an organization and takes a counteroffer from their current organization needs to remember that they are putting their organization in a tight spot. There can be some residual hangover of being forced into a situation where the organization has to do something under pressure without sufficient time to consider their options. There will inevitably be some irritation of being put in that spot.

Furthermore, leveraging an offer to better your situation with your current employer can be interpreted as disloyalty. In the event that the current employee chooses to accept the counteroffer, this can have social consequences, losing the respect and trust of your colleagues, and limiting your long-term options with the company. This can put that employee first on their list to go out in the event of downsizing or restructuring.

Candidates should also consider that accepting a counteroffer may sour their relationship with the search firm. As they say, “once burned, twice shy.” Any person who has gone through the long, arduous job search process only to accept a counter offer will certainly be noted in the search firm’s files. As an example, an incident occurred where somebody accepted an offer for a CEO position in a merger, and that person has been miserable. But he can’t do anything about it because he burned a bridge with one of the major search firms when he accepted an offer, only to back out of it later.

These days, organizations make counteroffers that they would not have made a few years ago out of desperation and fear of losing people in this turbulent market. But companies must also remember that, once accepted, the information about the counteroffer has a way of spreading through the organization.  It is possible that employees will think to themselves: “So-and-so was going to leave, but ended up getting a raise instead. I’ll try to do it too.” It is essential that organizations communication well with their people so that things don’t get to that point.

Negotiating with integrity

A far better approach that eliminates the need to negotiate a counteroffer getting it all on the table before the potential new company even makes the offer. Have a conversation with your boss, saying, “Look, I’m being recruited heavily, and I’m leaning toward it. Before I continue in this direction, I just wanted to give you the courtesy of a heads up, and I’d like to talk to you about my career development.”

Having an honest dialogue before an offer is made allows both parties to have ample time to consider what is in their best interest without many of the long-term consequences for both the individual and the organization that comes from the hasty counteroffer or the acceptance thereof.

Author: Larry TylerAs the founder and CEO of Tyler & Company, a leading healthcare executive search firm, he specialized in CEO searches. During his tenure he conducted approximately 185. One half of those searches involved non-profit boards, the other half were advisory boards. After the sale of Tyler & Company to Jackson Healthcare in 2013, Larry stayed on during a three-year transition, developing the Practical Governance Group which gives education and training to healthcare boards. But his passion for helping senior executives find the right role remains strong.